U.S. Reps. Mike Coffman, R-Colo. and Diana DeGette, D-Colo. (Brennan Linsley, Associated Press file)

Federal bills from Colorado legislators seek to shield state marijuana laws, open banking

Colorado federal lawmakers this week amplified efforts to protect state-enacted marijuana laws and cannabis businesses.

Reps. Diana DeGette and Mike Coffman on Thursday introduced the Respect States’ and Citizens’ Rights Act of 2017, which would add a provision to the Controlled Substances Act that would prevent federal preemption of state law. A day earlier, Colorado’s two senators threw their support behind banking legislation for the marijuana industry.

DeGette, a Democrat, and Coffman, a Republican, said in interviews Thursday that they resurrected their legislation — it previously was introduced in 2012, 2013 and 2015 — because of the saber-rattling that’s coming from the new administration around drugs, crime and marijuana enforcement.

“It’s really important right now, obviously, because it would clarify what the federal law is,” DeGette said. “What would flow from that, I think, would be letting people have their bank accounts and ensuring (Attorney General) Jeff Sessions and the Department of Justice aren’t going to come down and enforce the federal laws on states that have exercised their right.”

Under the Controlled Substances Act, marijuana is listed as a Schedule I substance — the strictest of classifications, defined as having a high potential for abuse and no currently accepted medical use.

DeGette and Coffman’s bill aims to clarify congressional intent within the CSA by inserting a provision about federal preemption:

“(b) SPECIAL RULE REGARDING STATE MARIHUANA LAWS.–In the case of any State law that pertains to marihuana, no provision of this title shall be construed as indicating an intent on the part of the Congress to occupy the field in which that provision operates, including criminal penalties, to the exclusion of State law on the same subject matter, nor shall any provision of this title be construed as preempting any such State law.”

Related: Why the federal government still calls cannabis “marihuana”

That list of states has increased significantly since DeGette and Coffman first broached this issue in 2012, when Colorado voters decided to legalize adult-use marijuana. Currently, 29 states, a number of U.S. territories and Washington, D.C., have medical marijuana laws; eight states have recreational marijuana laws; and several others allow the limited use of non-psychoactive cannabidiol (CBD).

The support in Congress has grown as well, DeGette said.

“More states are legalizing either recreational or medicinal marijuana and their representatives are recognizing that this is creating some unique challenges that need to be addressed,” she said.

However, the federal marijuana bills may never see the light of day because of staunch opposition from committee chairs, Coffman said.

“I worry that we’re not where we need to be,” he said.

But Coffman, who opposed Colorado’s legalization of recreational marijuana, said it’s a matter of states’ rights and a matter of fighting for his constituents.

“I think in terms of getting the administration to back off, this is really important,” he said. “Even if this legislation doesn’t pass, it sends a signal to the administration to watch it when it comes to coming down on states that have made the decision for medical and/or recreational marijuana.”

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The resurrection of the Respect States’ and Citizens’ Rights Act of 2017 came a day after Colorado’s senators, Democrat Michael Bennet and Republican Cory Gardner, announced their sponsorship of the Secure and Fair Enforcement (SAFE) Banking Act of 2017, the Senate companion bill to legislation introduced a few weeks back by Rep. Ed Perlmutter, D-Colorado.

The initial sponsors of the Senate version of the SAFE Banking Act include Jeff Merkley, D-Oregon; Ron Wyden, D-Oregon; Rand Paul, R-Kentucky; Patty Murray, D-Washington; Elizabeth Warren, D-Massachusetts, Catherine Cortez Masto, D-Nevada; and Brian Schatz, D-Hawaii.

“Conflicting federal and state marijuana laws make it difficult for legitimate businesses to use the basic financial services they need access to and this bipartisan legislation gives them that access they need,” Gardner said in a statement. “We must also take into account the risk to public safety as these businesses are being forced to carry around bags of money to pay for their employees and rent. Legal businesses should not be treated like this, and I’m glad that Republicans and Democrats are working together to address this issue.”

The bill’s primary aims are as follows, according to Gardner’s office. The legislation would prevent federal banking regulators from:

  • Prohibiting, penalizing or discouraging a bank from providing financial services to a legitimate state-sanctioned and regulated cannabis business, or an associated business (such as a lawyer or landlord providing services to a legal cannabis business);
  • Terminating or limiting a bank’s federal deposit insurance solely because the bank is providing services to a state-sanctioned cannabis business or associated business;
  • Recommending or incentivizing a bank to halt or downgrade providing any kind of banking services to these businesses;
  • Taking any action on a loan to an owner or operator of a cannabis-related business.

Other provisions include:

  • Creating a safe harbor from criminal prosecution and liability and asset forfeiture for banks and their officers and employees who provide financial services to legitimate, state-sanctioned cannabis businesses, while maintaining banks’ right to choose not to offer those services;
  • Requiring banks to comply with current Financial Crimes Enforcement Network (FinCEN) guidance, while at the same time allowing FinCEN guidance to be streamlined over time as states and the federal government adapt to legalized medicinal and recreational cannabis policies.

Denver Post staff writer Mark Matthews reported from Washington, D.C.

The Respect States’ and Citizens’ Rights Act of 2017